One possible positive effect (for the consumer) of "per-bit" pricing is the opportunity to buy larger pipes but only pay for what you use. Right now flat-rate pricing mostly assumes you're going to, within some statistical model, actually use the bandwidth you get, or certainly that someone buying a DS3 is going to use a lot more bandwidth, on average, than someone with a DS1. So if you usually only use, say, 25-75% of a DS1 then you'd be well-advised to only buy a DS1, even if 10% of the time you really have a good use for more. For example, imagine a company which wants to back up all the remote servers in their branch offices once per week, but would like to get it done as quickly as possible so it completes in the wee hours when the databases are quiescent. The rest of the time a DS1 might suffice for the usual email etc, but for those few hours, for the backups which run on Sunday night, a full 45mb/s would be useful. Under the flat-rate model that company would have to either buy a DS3 full-time, for around $50K/mo, or live with the DS1 for around $2K/mo (or possibly find some equivalent flat-rate option in between such as a 10mb, but that begs the point, they still can't pay for a T1 when they need a T1 and a T3 when they need a T3.) It all depends on the actual pricing models which might arise, which indeed is an arguable point, but without stating that assumption one can't argue the more general issue. For example, if I were to offer you either: a) DS1 $2K/mo b) DS3 $48K/mo c) per-bit DS3 $2K/mo/DS1-equivalent pro-rata per minute you'd be foolish, unless you have no control over your bandwidth usage (a whole other issue) not to take (c) if you occasionally need bursts of high bandwidth and were seriously considering going to the DS3; the most it can cost would be $48K/mo if you used that bandwidth 7x24 100%, but you almost certainly won't, so it can only cost you less. Now, it's admittedly not likely that someone wouldn't charge some sort of premium for the pro-rata bandwidth, perhaps it would actually be $2500/DS1-equivalent, but unless you really need the DS3 100% of the time (in which case you should buy the dedicated DS3) it's still likely to cost you a lot less. At a 50% utilization that $2500/mo pro-rata still only costs you around $30K/mo which is significantly less than the $48K/mo for committing to the whole pipe. As we move to, e.g., gigabit pipes I suspect this sort of pricing model will become more and more popular, or else not too many gigabit pipes will get sold. Buying 100% of a gigabit at the DS1 equivalent of, say, $2K/mo would come to about $2 million/gb/month. Customers certainly exist for $2M/mo connections, but not many of them. And the incremental cost of installing a pipe capable of gigabit bandwidth on demand is relatively very small (mostly just a piece of fiber and the boxes on each end), likely to be worthwhile even if the customer just uses $10K or more per month of that potential $2M/mo (pro-rata), or something like that much, much smaller than the $2M/mo. We're a case in point of that, we have a good amount of fiber to our offices here, NYNEX was happy to put lots of it in rather than ever trench the street again (they had the backhoes out for us on this urban street twice.) However, one remaining problem is the local loop, the RBOCs, who do like to price any service as if you are going to use 100% of it. Thus, to even buy a per-bit DS3 from an ISP you would still have to pay my RBOC around $5K-$10K/mo just for the local loop under the current model, which if nothing else raises the bar for such services. I think this is something Sidgemore is accounting for in his comments, however. -- -Barry Shein Software Tool & Die | bzs@world.std.com | http://www.world.com Purveyors to the Trade | Voice: 617-739-0202 | Login: 617-739-WRLD The World | Public Access Internet | Since 1989 *oo*